Health Insurance: Group health insurance without employer backing to be a reality

IN AN attempt to increase health insurance penetra­tion, insurance regulator may shortly allow group health insurance for homog­enous groups without em­ployer-employee relation.

The proposal comes in the wake of both finance minister Palaniappan Chi­dambaram and sector regu­lator, Insurance Regulatory and Development Authority (Irda) chairman J Hari Narayan agreed on allowing group health insurance cover for self-help groups, professional associations such as teachers in a school, nurses in a hospital, auto-driver associations or domestic workers.

General insurers feel that if the concept is extended to non-life segment, specially health insurance, it would help increase the penetra­tion to a large extent.

Finance minister Chi­dambaram is scheduled to meet with general insurance companies’ chief executives along with the Irda chair­man in near future where the issue of extending group health insurance to homog­enous groups is expected to figure prominently.

“Although the agenda for discussion has not been fi­nalised yet, we feel it would focus heavily on reach of in­surance. Moreover, if gen­eral insurers are allowed to come up with products for homogenous groups, hav­ing similar risk profile but no employer-employee re­lation then health insur­ance will reach masses,” said Bhargav Dasgupta, MD and CEO of ICICI Lombard General Insurance.

Last week, a series of re­forms were announced by finance ministry to revive life as well as non-life in­surance sectors. More re­forms and direction is ex­pected shortly for non-life insurance category.

Generally, group insur­ance products are priced lower than the retail seg­ment products and the cov­erage is also better. For in­stance, the group covers at present being provided to employers for their employ­ees covers the members against pre-existing dis­eases, maternity related hos-pitalisations and has low waiting period though same is not the case with most re­tail health insurance plans.

Pricing is another area where the group insurance holders are enjoying higher benefits, since the risk analysis is based on group, insurers offer discounts. De­pending on the size of the or­ganisation and competition, discounts may change.

“The pricing is opti­mised for group health in­surance plans and depends on the overall risk factors of the group, rather than one or two individuals, because of which prices are favourable for the group,” said Rakesh Jain, CEO, Re­liance General Insurance.

Depending on the re­quirement of the group opt­ing for group coverage, in­surance companies offer several options to choose from like sum insured, co-payment options, list of ap­proved hospitals and remov­ing certain exclusions.

“Provision of customising the health insurance plan is only available in group cate­gory and if the group insur­ance is opened to broader market, it will bring signifi­cant change in health insur­ance penetration,” said Neeraj Basur, CFO, Max Bupa Health Insurance.